Equipment Type

Tier 4 Equipment’s Effect on 2016 Acquisition Plans

Fleet managers are concerned about increased prices of machines equipped with the latest emission-reducing technologies, and they're adjusting budgets accordingly.
December 18, 2015

Rod Sutton is editorial director of Construction Equipment magazine. He is in charge of editorial strategy and writes a monthly column for the magazine, The Sutton Report. He has more than 30 years in construction journalism, and has been with Construction Equipment since 2001.

Nearly all models in major machine categories have been updated with Tier 4-Final engines. Yet many fleet managers have hesitated to purchase the new equipment. Many fleets have Tier 3 machines with many hours of useful life available; others are cautious about investing in equipment when project backlogs are still light.

Still others, according to Construction Equipment's Annual Report & Forecast, are concerned about increased prices of machines equipped with the latest emission-reducing technologies.

The re-engineering and research-and-development costs associated with producing machines that meet EPA-mandated emissions standards must be recouped, so manufacturers haved increased prices for equipment with Tier 4-Final engines.

Fleet managers have responded to cost increases in three ways: They have or will boost equipment-acquisition budgets, they will reduce the number of machines they replace, or they will turn to alternative acquisition strategies such as rental or used-equipment purchases.

But purchase price isn’t the only concern, although it is the No. 1 issue. Maintenance of machines with emissions technologies also causes heartburn.

The population of Tier 4 equipment is small, so managers do not have historical data or actual experience with maintenance to know what to expect. Diesel exhaust fluid must be managed and integrated into field-maintenance procedures. Technicians must be trained. Diesel particulate filters must be properly regenerated and cleaned.

Only 10 percent of respondents are “generally prepared” for Tier 4 equipment. The accompanying charts show why the other 90 percent are not.

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